U.S. raises 2013 natural gas production forecast

The U.S. raised its forecast for natural gas output in 2013 by 0.4% and increased its outlook for prices by 1.6% on more normal winter heating demand.

Marketed gas production will average 69.84 billion cubic feet a day this year, up from 69.59 billion estimated in December, the Energy Department said in its monthly Short-Term Energy Outlook, released today in Washington. Output averaged a record 69.19 billion in 2012, compared with last month’s estimate of 69.22 billion.

The department’s first estimate for 2014 showed production declining for the first time in nine years to average 69.54 billion cubic feet a day.

Gas prices at the benchmark Henry Hub in Erath, Louisiana, will average $3.74 per million British thermal units this year, compared with the previous estimate of $3.68 and $2.75 in 2012, according to the report from the department’s Energy Information Administration.

Lower-48-state output will average 64.67 billion a day, up from 64.12 billion estimated in December and 64.06 billion in 2012, department data show. The region’s production will climb to 64.91 billion in 2014, setting a 10th straight yearly record.

Gulf Gas

The production estimate for the Gulf of Mexico was raised to 4.27 billion cubic feet a day in 2013 from 4.21 billion estimated in December, the report showed. Offshore output will increase for the first time in four years.

The department’s forecast for gas consumption rose to 69.67 billion cubic feet a day from 69.41 billion estimated last month. Consumption was 69.27 billion cubic feet a day in 2012.

Demand for gas from power plants will average 22.87 billion cubic feet a day this year, up from the previous estimate of 22.55 billion. Electricity generators consumed a record 24.97 billion cubic feet a day in 2012, revised down from 25.16 billion estimated last month.

Natural gas for February delivery fell 4.6 cents, or 1.4 percent, to $3.22 per million Btu at 1:49 p.m. on the New York Mercantile Exchange. Prices have gained 5.2 percent from year ago.